Cardew - advice please!

melbury

Is it better to go for a plan with or without a standing charge? I am never sure about this. Why do they do the two, I find it confusing.

I am sure you will be able to clarify this in simple terms for me.

Many thanks.

Cardew

For the great majority of people it makes no difference.

All companies, except Ebico, effectiively collect a 'standing charge' in one way or another.

That 'standing charge' is collected by a daily charge of xx pence or by charging extra for the first xxx kWh per year.(tier 1 or primary units)

For most companies either method raises the same 'extra' money over a year - provided you use all the tier 1 units.

e.g. a daily charge of 20p a day costs £73 extra a year - or paying 1.6p extra for 4,572 tier 1 units costs £73 extra.

Which is best?
Well I have a little used annex with a separate gas and electricity supply and use very little of either; so for me the no daily standing charge is much better.

Some people, in the summer, might not use all their tier 1 gas units so, like myself, will prefer not to have a daily standing charge.

Having said the above, it seems that some Utility companies are attempting to alter their pricing structure to prevent the low users paying a lower 'standing charge'.

NPower have introduced their infamous 'sculpting'. Other firms, like BG Click 5 have reduced the number of tier 1 units, but made them more expensive.

To give a simplistic example:
Charging, say, 4p for 4,000 tier 1 units(with tier 2 costing 2p) costs £160. Charging 8p for 2,000 tier 1 units(with tier 2 costing 2p) also cost £160.

So someone like myself who used, say, 2,500kWh pa would have paid £100.(2,500 x 4p)
Now I pay £170(2000x 8p + 500 x 2p)

melbury

Thanks very much for the detailed explanation, think I get it now.